Affirming what it has maintained for nearly four decades now, the Local Agency Formation Commission voted Wednesday to accept a report that indicates the San Mateo County Harbor District could be dissolved and absorbed by another agency.
The commission unanimously accepted a report that designates the Harbor District as having a “zero sphere of influence,” meaning that it could in theory be taken over by another agency that provides the same services.
The vote is not a move toward dissolution, however, as either the Harbor District, county or South San Francisco would have to initiate the process.
The district owns Pillar Point Harbor on the coast and operates Oyster Point Marina/Park in South San Francisco.
County Supervisor Don Horsley, also on the LAFCo board, suggested the district be given 18 months to correct its course. If it doesn’t, Horsley said, the county should move to dissolve it.
At Wednesday’s LAFCo meeting, Tom Mattusch, the new Harbor District Board of Commissioners president, urged the commission to give him more time to get the district back on track. The district has been plagued by poor governance and accounting practices for years, according to the San Mateo County Civil Grand Jury.
LAFCo first reported that the district could be absorbed by another agency way back in 1977 and has held the same stance sense.
LAFCo’s sphere designation is based on the Harbor District having countywide boundaries and duplicating governance and administrative capacity of the county. Multiple municipal service reviews also identify the lack of nexus between countywide property tax revenue and services that are provided at only two of many marinas in the county and the inappropriate subsidy of enterprise activities, according to LAFCo’s Executive Director Martha Poyatos.
The district receives about $5 million a year in taxes from all property owners in the county to subsidize its operations, which are primarily funded by fees from rents and the services it provides.
Mattusch said the Harbor District Board of Commissioners had let the county down in the past by supporting a bad general manager.
The district is currently looking to hire a new general manager and has narrowed the list down to eight candidates, Mattusch said.
The Board of Commissioners, he said, has established a five-year capital improvement plan, moved toward transparency and is looking to refinance its yearly debt payments which are now $1.4 million a year.
“The district represented in the grand jury report or sphere of influence report is not the one you see today. Come back in a year and see if I’m blowing smoke,” Mattusch said about implementing change.
The district has significant infrastructure improvement needs totaling about $17.3 million over the next five years, according to consultant Richard Berkson with Economic and Planning systems, which conducted the municipal service review.
Berkson reported that significant discord on the board has impaired the Harbor District’s daily operations and that staff turnover and board conflicts have slowed the agency’s progress.
Berkson did say that the district’s “budgeting process has improved.”
About 10 public speakers all urged the LAFCo board not to move forward with dissolution.
“Changes take time,” said San Bruno resident Robert Reichel. LAFCo and the grand jury only make recommendations that are not mandates, he said.
Coastsider John Ullom said there was “no hope the county can do a better job than the commission” when it comes to running the Harbor District.
While the commission voted unanimously on three motions and a resolution to accept the various reports, Commissioner Ric Lohman admitted he wasn’t exactly sure what his vote meant Wednesday.
He wanted to make it clear that he was not voting for dissolution and that he did not agree with some of the reports’ findings.
“I’m against the idea that only coastside residents” benefit from the harbor, Lohman said.
The Harbor District has been operating under the “zero sphere of influence” designation for 40 years which has not impeded its ability to operate, Poyatos said.
Commissioner Michael O’Neill said new board leadership should have “a chance to correct the sins of the past before the hammer comes down.”
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